Category: The Coming Crash

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europeâ€™s single currency is coming apart at the seams. How did it all go so wrong?

Well, what Iâ€™ve been hearing with growing frequency from members of the policy elite â€” self-appointed wise men, officials, and pundits in good standing â€” is the claim that itâ€™s mostly the publicâ€™s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorateâ€™s foolishness.

So this seems like a good time to point out that this blame-the-public view isnâ€™t just self-serving, itâ€™s dead wrong.

The fact is that what weâ€™re experiencing right now is a top-down disaster. The policies that got us into this mess werenâ€™t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people â€” in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

The right’s victory in separating taxes from the services they pay for is apparent when citizens are asked what they’d like to see cut in order to cut that deficit. In January, Gallup released a poll on those specifics. They asked which of nine areas of government services they’d like to see cut. Only cutting foreign aid â€“ which represents about two percent of the federal budget â€“ met with the approval of a majority of those surveyed. Even majorities of Republicans opposed cuts to everything but foreign aid and arts funding.

Taken together, this shows how difficult it is for law-makers to arrive at good public policies. Their constituents wants their cake, they want to eat it, but they don’t think they need to pay the tab for it. Politicos offer tax cuts to get themselves elected, but then face outraged constituents when they try to cut services. Small wonder that we’ve only managed to balance the budget in one brief period during the boom years of the 1990s.

We do face serious issues in this country. We need a serious debate about how best to solve them. But we’re having that debate in a democracy populated by citizens who have little or no clue where their tax dollars go. And you can credit the anti-tax crusaders and their habitual mendacity for that sorry state of affairs.

We could put all the crooks in jail (and we should), but Goldman Sachs would still be there. We could tighten regulations more and more, but the big banks would still be armed with enormous wealth and power to subvert them. Regulations and jail are not good enough unless we want to construct massive regulatory and enforcement agencies that rival the banks in size and scope.

Rather, the report proves why the entire financial edifice must come down. Our nation cannot survive economically unless we do away with the large Wall Street banks and investment houses. Itâ€™s not just that they are too big to fail. They are too big â€“ period!

When did our democracy die? When did it irrevocably transform itself into a lifeless farce and absurd political theater? When did the press, labor, universities and the Democratic Partyâ€”which once made piecemeal and incremental reform possibleâ€”wither and atrophy? When did reform through electoral politics become a form of magical thinking? When did the dead hand of the corporate state become unassailable?

I listened to President Obama’s Nobel Prize acceptance speech with the same feeling of growing nausea that I used to get listening to Bush. Yes, hard to believe that the two could ever be compared as public speakers but, with a year’s full of speeches now on the record, the inconvenient truth about Obama is that his actions rarely match his rhetoric.

In each of the four critical areas that define this moment — the crashing global economy, healthcare reform, global climate change, and American militarism — however audacious and stirring his words, Obama’s appointments, policies, and decisions are barely distinguishable from Bush’s.

For the full inside story on the economy, Matt Taibi’s recent piece in Rolling Stone — Obama’s Big Sellout — makes it painfully clear that from the moment Obama took power he turned the economy over to the very same rich scumbags who caused the economic crisis, but who were all major donors to Obama’s campaign.

“This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.”

It is hard to find a single action on the economy that would have been any worse under Bush.

Ditto healthcare reform. Oh, they’re all making noise now about how it’s fine that the public option is dead because we’ll expand Medicare instead, and won’t that be great. Only a) it will never happen, since the same crew of congressional creeps who blocked single payer and the public option are lining up to block this latest plan and b) even if it does happen it is still a massive wealth-producing machine for the insurance and pharmaceutical industries.

Any un- or under-insured folks out there thinking that relief is on the way are seriously deluded. In the end they will change some terminologies and claim some reforms and the system will continue to decline just as it did under Bush.

Climate-change? In advance of the Copenhagen summit, Obama and the American congress did not even address the issue. The strongest message in the American zeitgeist is that climate scientists are crooks and cheaters; Obama made no effort to set the record straight on Climate-gate or to rouse the public for Copenhagen.

Maybe he gets a pass on this one, given that there’s so much on his plate. The sorry fact remains that the state of American environmentalism is as lame and disjointed as if Bush were still in charge.

Finally, as Obama picks up his Peace Prize: I cannot think of single thing that Obama has done — beyond his nifty speechifying — that is in any way better than Bush regarding American militarism and the war on whoever.

The many injustices of Guantanamo; the secret torture prisons and the practice of rendition; rejection of the international treaty banning land mines; sucking up to the Israelis and turning a blind-eye to continued illegal settlements; escalating an unwinnable war that will only destroy more innocent lives and generate new enemies; and through it all, not a hint of the understanding that militarism represents a hellish misappropriation of essential resources.

As during the darkest hours of the Bush administration, we should give up all hope of a peaceful transition to a more humane world. With Obama at the helm things will be getting much, much worse — a total breakdown of the dominant power structure — before there’s any chance of anything getting better.

If a clerk at H and R Block sat down for an hour with Uncle Sam, he’d surely be reaching for the Pepto-Bismol after five minutes. We’ve been able to play games with ourselves for a whole year about the true state of our capital resources.

It is a mighty big system, kept chugging along on little more than inertia, as things will when they are headed downhill and gravity exerts its influence. But it begins to seem now like a great reeking freight train of toxic waste out-of-control on the downgrade and headed for a very nasty smash-up.

The Green Shoots crowd â€” a sub-category of identity maniacs, who think the USA is immune to the laws of history and physics â€” has made common cause with the oil and climate deniers to proclaim that we are returning to normal, back to the “consumer” orgy, the suburban sprawl nexus of McHousing and miracle mortgages, and new frontiers of corporate profit-raking.

They are tragically wrong.

Instead, we’re headed into the wildest king-hell debt workout that the world has ever seen, which will propel a lot of people used to working in air-conditioned cubicles into a world made by hand. We march day by day into the great holiday season with mortgages going unpaid and the credit cards getting cancelled and money disappearing and the fears and grievances mounting.

Pretty soon, the folks doing “God’s work” at Goldman Sachs (and their tribal kin on Wall Street) will announce their annual bonuses (because they are publicly-held companies, which have to do so).

Things are veering toward such extreme desperation that the US government might fall under the sway, by extra-electoral means, of an ambitious military officer, or a group of such, sometime in the near future. I’m not promoting a coup d’etat, you understand, but I am raising it as a realistic possibility as elected officials prove utterly unwilling to cope with a mounting crisis of capital and resources.

The ‘corn-pone Hitler’ scenario is still another possibility – Glen Beck and Sarah Palin vying for the hearts and minds of the morons who want ‘to keep gubmint out of Medicare!’ – but I suspect that there is a growing cadre of concerned officers around the Pentagon who will not brook that fucking nonsense for a Crystal City minute and, what’s more, would be very impatient to begin correcting the many fiascos currently blowing the nation apart from within.

Remember, today’s US military elite is battle-hardened after eight years of war in Asia. No doubt they love their country, as Julius Caesar and Napoleon Bonaparte loved theirs. It may pain them to stand by and watch it dissolve like a castle made of sugar in a winter gale.

I raise this possibility because no one else has, and I think we ought to be aware that all kinds of strange outcomes are possible in a society under severe stress. History is a harsh mistress. For all his ‘star quality’ and likable personality, President Obama is increasingly perceived as impotent where the real ongoing disasters of public life are concerned, and he has made the tragic choice to appear to be hostage to the bankers who are systematically draining the life-blood from the middle class.

Whatever we are seeing on the S & P ticker these days does not register the agony of ordinary people losing everything they worked for and even believed in. In a leadership vacuum, centers don’t hold, things come apart, and rough beasts slouch toward Wall Street.

I’m serenely confident that we’re in the twilight of Happy Motoring now.Â Without debt service there is no auto industry, and we’re toast where debt service is concerned.Â All we can do now is give cars away, or give US citizens free money to buy them — which we are obviously already doing with “Cash for Clunkers” — which is additionally hilarious in the same nation that is deeply paranoid about the government giving anybody free health care.Â What a nation of morons we have become.

Would any sane person think dumpster diving would have stopped Hitler, or that composting would have ended slavery or brought about the eight-hour workday, or that chopping wood and carrying water would have gotten people out of Tsarist prisons, or that dancing naked around a fire would have helped put in place the Voting Rights Act of 1957 or the Civil Rights Act of 1964? Then why now, with all the world at stake, do so many people retreat into these entirely personal â€œsolutionsâ€?

Part of the problem is that weâ€™ve been victims of a campaign of systematic misdirection. Consumer culture and the capitalist mindset have taught us to substitute acts of personal consumption or enlightenment for organized political resistance. An Inconvenient Truth helped raise consciousness about global warming. But did you notice that all of the solutions presented had to do with personal consumptionâ€”changing light bulbs, inflating tires, driving half as muchâ€”and had nothing to do with shifting power away from corporations, or stopping the growth economy that is destroying the planet? Even if every person in the United States did everything the movie suggested, U.S. carbon emissions would fall by only 22 percent. Scientific consensus is that emissions must be reduced by at least 75 percent worldwide.

It’s not working. The Bush-Obama strategy of throwing trillions at the banks to solve the mortgage crisis is a huge bust. The financial moguls, while tickled pink to have $1.25 trillion in toxic assets covered by the feds, along with hundreds of billions in direct handouts, are not using that money to turn around the free fall in housing foreclosures.

As The Wall Street Journal reported Tuesday, “The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing.” The same association said that the total refinancing under the administration’s much ballyhooed Home Affordable Refinance Program is “very low.”